Budgeting and Financial Wellness: Tips for Gen Z

Budgeting and Financial Wellness: Tips for Gen Z

April 18, 2023



As a member of Generation Z, you are part of the most diverse and digitally savvy generation to date. You also face unique financial challenges, from student loan debt to a volatile job market. With the typical annual salary for a Gen Zer being $32,500, and the average rent for a two-bedroom apartment being $1,715 a month, every dollar matters. By practicing smart budgeting and financial wellness, you can gain control over your finances and set yourself up for success.

Here are some tips to help you get started:

  1. Create a Budget

The first step to financial wellness is creating a budget. This means tracking your income and expenses to get a clear picture of where your money is going. You can use a spreadsheet, pen and paper, or digital apps, like Rocket Money, Mint, or You Need A Budget (YNAB).

Start by listing all your sources of income, including your job, freelance work, or any financial support you receive from family or friends. Next, list all your expenses, such as rent, utilities, groceries, transportation, entertainment, and any debts you have.

Once you have a clear picture of your income and expenses, you can set spending limits for each category and adjust your habits accordingly. Remember to be realistic and flexible, and to review your budget regularly to make sure it still works for you.

Here’s an example:

Category

Monthly Budget

Total Actual

Variance

Income

$3,000

$3,000

$0

Student Loans

$200

$200

$0

Rent/mortgage

$1,100

$1,100

$0

Utilities

$300

$320

-$20

Car payment

$250

$252

-$2

Insurance

$300

$300

$0

Subscriptions

$50

$52

$2

Cell Phone

$100

$120

-$20

Groceries

$400

$420

-$20

Savings

$200

$200

$0

Total

$2,900

$2,964

-$64

 

    2. Build an Emergency Fund

An emergency fund is a crucial part of financial wellness, as it can help you weather unexpected expenses, such as a car repair or a medical bill. Aim to save at least three to six months' worth of living expenses in your emergency fund.

Start small by setting aside a percentage of your income each month, and gradually increase your savings as you can. You can also automate your savings by setting up automatic transfers from your checking account to your savings account.

     3. Reduce Debt

Student loan debt is a major financial burden for many, but there are steps you can take to reduce your debt and avoid future debt. Start by paying more than the minimum payment each month, as this can help you pay off your debt faster and save money on interest.

You can also consider refinancing your student loans to get a lower interest rate, or applying for loan forgiveness or income-driven repayment plans if you qualify. And if you have credit card debt, aim to pay off your balances in full each month to avoid high interest charges.

      4. Invest in Yourself

Investing in yourself is another key part of financial wellness, as it can help you increase your income and build your skills and knowledge. This can include pursuing higher education or certifications, taking on freelance work or side hustles, or networking and building relationships in your industry.

By investing in yourself, you can also increase your earning potential and set yourself up for future financial success.

       5. Seek Help When Needed

Finally, don't be afraid to seek help when you need it. This can include talking to a financial advisor, seeking out free resources and workshops, or joining online communities and forums to connect with others who are navigating similar financial challenges.

Remember that financial wellness is a journey, and that it takes time and effort to achieve. By creating a budget, building an emergency fund, reducing debt, investing in yourself, and seeking help when needed, you can take control of your finances and set yourself up for a bright future.

 

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